The Lower Drug Costs Through Competition Act: Prioritized Review for Some ANDAs . . . and a Priority Review Voucher

February 1, 2017By Kurt R. Karst

Earlier this week, Representatives Gus Bilirakis (R-FL) and Kurt Schrader (D-OR) announced the introduction of H.R. 749, the Lower Drug Costs Through Competition Act.  The bill, which appears to be nearly identical to H.R. 4784 introduced in March 2016, is intended “to lower the cost of prescription drugs by increasing competition in the market,” according to a press release.

Specifically, Title I of H.R. 749 would amend the FDC Act to add Section 505(j)(11), stating:

(A) The Secretary shall prioritize the review, and act not later than 180 calendar days after the date of the submission of an application, on an application that has been submitted and accepted for review under this subsection, or on a supplement to such an application, that is for a drug that—

(i) has been introduced into interstate commerce by not more than one manufacturer or sponsor, as applicable, in the last 3 months and with respect to which tentative approval under paragraph (5) has been granted for not more than 2 applications; or

(ii) has been included on the [drug shortage] list under section 506E.

(B) The Secretary may expedite an inspection or reinspection under section 704 of an establishment that proposes to manufacture a drug described in subparagraph (A).

The 6-month (180-day) FDA review period provided for above is not much different than the 8-month review and action goal for certain Priority Original ANDAs identified in the GDUFA II Proposed Commitment Letter, and is even longer than the 4-month review and action goal proposed under GDUFA II for certain Priority PASs.

Title II – “Incentivizing Competition” – of the “Lower Drug Costs” is interesting. It would create a Priority Review Voucher (“PRV”) for ANDAs – a “Generic PRV” – allowing for review and action on an ANDA “not later than 180 calendar days after such application has been submitted and accepted for review” (emphasis added).  Of course, if the 180 days does not begin until after both submission and acceptance of an ANDA (which acceptance could be 30 days, 60 days, or more after initial submission of an ANDA), then there doesn’t really seem to be much of a benefit to obtaining and using a Generic PRV, particularly given the proposed GDUFA II goals.  In any case, like other PRVs, a Generic PRV would be transferable, would require pre-use notice to FDA, and would be subject to a special priority review user fee set by FDA each fiscal year.

Although another version of the bill was introduced in Spring 2016, H.R. 749 appears, in one sense, to build on legislation introduced in the U.S. Senate at the tail end of the 114th Congress – S. 3387, the Safely Advancing Valuable and Inexpensive New Generic Solutions Act, or “SAVINGS Act” – which sought the creation of a statutory expedited review mechanism for ANDAs for certain drug products without generic competition and in shortage.  But, as noted above, the Lower Drug Costs bill goes further.  The bill continues a recent trend that seems to generally favor the creation of PRVs (as well as new tax credits) over new or extended periods of marketing exclusivity (see our previous posts here, here, and here).  (Although we note that Section 5001 of a Discussion Draft of the 21st Century Cures Act would have extended 180-day generic drug exclusivity and interchangeable biosimilar exclusivity by an undefined amount of time for “American-manufactured” products – see our previous post here.)

There are two additional noteworthy provisions in H.R. 749. First, the bill would amend the Tropical Disease PRV provisions at FDC Act § 524(a)(4)(A) concerning what constitutes a “tropical disease product application.”  The bill would add the requirement that such application contain “reports of new clinical investigations (other than bioavailability studies) essential to the approval of the application and conducted or sponsored by the applicant.”  This could limit the number of Tropical Disease PRVs handed out by FDA, as NDA sponsors would need to conduct or sponsor studies, instead of, for example, relying on published literature reports of studies.

Second, H.R. 749 requires, in Title III, that the Comptroller General conduct a study on Risk Evaluation and Mitigation Strategies (“REMS”). Among other things, the study would examine “[t]he effect of REMS programs and additional risk mitigation strategies, including non-REMS restricted distribution systems, on generic entry into the marketplace” and on drug prices.